System and method of electronic data transaction processing

ABSTRACT

A transaction process system ( 10 ) provides for data transactions between parties. In a credit card transaction, the parties are the merchant ( 20 ), acquiring bank ( 24 ), card association ( 34 ), issuing bank ( 14 ), and cardholder ( 12 ). A transaction processing center ( 30 ) is positioned between the acquiring bank and the card association. The transaction processing center provides data processing channels for message-based processing ( 72 ) and filed-based processing ( 76 ). The file-based processing uses an incoming queue ( 80 ) and outgoing queue ( 84 ) to simplify the interface. The transaction processing center also provides for currency conversions and account reconciliation on a per transaction basis. The transaction processing center uses a scheduler ( 160 ) to efficiently manage the data processing resources.

CROSS REFERENCE TO RELATED PATENT APPLICATIONS

[0001] The present patent application is related to copending U.S.patent application Ser. No. ______, Attorney Docket No. 670744.00002,entitled “Method of Scheduling and Event Processing in ComputerOperating System” and filed concurrently herewith by W. Jeffrey Knowleset al. The present patent application is further related to copendingU.S. patent application Ser. No. ______, Attorney Docket No.670744.00004, entitled “System and Method of Currency Conversion inFinancial Transaction Process” and filed concurrently herewith by W.Jeffrey Knowles et al. The present patent application is further relatedto copending U.S. patent application Ser. No. ______, Attorney DocketNo. 670744.00006, entitled “System and Method of Transferring DataThrough Transaction Process” and filed concurrently herewith by W.Jeffrey Knowles et al.

FIELD OF THE INVENTION

[0002] The present invention relates, in general, to data transactionprocessing and, more particularly, to system and method ofelectronically processing data transactions.

BACKGROUND OF THE INVENTION

[0003] An integral part of many financial transactions involves purchaseof goods and services by credit card or other electronic transfer offunds. Consumers use credit cards to purchase goods and services frommerchants and service providers. Businesses and government agencies useelectronic fund transfers to acquire goods and services and issue creditcards to employees as necessary to conduct business. Credit cards are aconvenient, safe, effective, and integral part of the economy.

[0004] There are typically three financial institutions involved incredit card transactions: card association, issuing bank, and acquiringbank. Well known card associations operate under the names of Visa andMasterCard. The issuing bank issues a credit card to a cardholder. Thecredit card will include a credit line that will impose certain limitson the cardholder's ability to make purchases. The cardholder agrees topay the amount due on the credit card statement, or minimum portionthereof with interest on the balance, to the issuing bank. The merchanthas an account or relationship with the acquiring bank to initiatecredit card transactions and ultimately receive payment for thetransaction. The card association operates between the acquiring bankand issuing bank to coordinate and simplify the large number oftransactions occurring on a daily basis.

[0005] A credit card transaction usually starts at the point of salewhere the cardholder has selected merchandise or service which he or shewishes to purchase. The merchant or service provider enters the creditcard number by swiping the card through a terminal to read informationstored on the magnetic strip or enters the credit card number directlyinto the terminal keypad. The terminal is connected to a communicationnetwork which electronically links the merchant to the acquiring bank orprocessing center. The acquiring bank is electronically linked to thecard association and the card association is electronically linked tothe issuing bank.

[0006] Most credit card transactions are a two-part process. In thefirst part, while the cardholder is interacting with the merchant at thepoint of sale, a purchase authorization request is forwarded via anelectronic communication network through the acquiring bank and cardassociation to the issuing bank. The purchase authorization includes themerchant identification, amount of the purchase, and cardholderinformation. The cardholder information may include name, address,primary account number, PIN number, fraud protection data, etc. Thepurchase authorization checks with the issuing bank to see that thecardholder is in good-standing with the bank, that the purchase iswithin his or her approved credit limit, and that there are no otherirregularities. The issuing bank approves the transaction for therequested amount and routes the approval back through the cardassociation and acquiring bank to the merchant. Even though no moneychanges hands, the cardholder and merchant complete their interaction.The cardholder leaves the store with the merchandise in hand and themerchant receives assurance that the money will be paid.

[0007] In the second part of the process, an aggregation of theindividual purchase authorizations is processed through the credit cardsystem to fund authorized transactions in a process known as clearingand settlement. During clearing and settlement, monies are transferredbetween accounts to complete specific pre-approved transactions.Transferring money, sometimes in different currencies, can be a timeconsuming, expensive, and error prone process. The aggregation ofpurchases and payment of net proceeds to the parties during clearing andsettlement is a more efficient and cost effective alternative toexchanging money during each transaction. Clearing and settlement mayoccur at the end of the day, or at regular intervals during the day, orevery few days depending on the volume of transactions and needs of theparties. However, the acquiring and issuing banks often do not have theresolution of the individual transactions to resolve discrepancies whenreconciling the aggregation of transactions. If unable to balance theclearing and settlement, the banks are often forced to absorb thediscrepancies based on the allocation of risk and may end up loosingmoney on certain transactions as part of the cost of doing business.

[0008] A principal function of the card association is to act as afunding clearing house for the clearing and settlement process. Anissuing bank may need to pay monies to a large number of acquiring banksand an acquiring bank may expect to receiving monies from a large numberof issuing banks. By operating through the card association, the issuingbank makes one wire transfer to the card association to make payments tospecific acquiring banks. Likewise, the acquiring bank receives one wiretransfer from the card association to settle transactions for specificissuing banks. The card association receives funds and allocates fundsto its individual members in order to clear and settle pending andapproved credit card transactions.

[0009] If the acquiring bank and issuing bank are based in differentcountries and operate with different native currencies, then thetransfer of funds often requires one or more currency conversions. Theacquiring bank generally leaves the currency conversions to the cardassociation but in doing so the acquiring bank looses control and anybenefit the conversion might yield to itself and to its customer, themerchant. In the present competitive marketplace, giving up control ofcurrency conversions involved in credit card transactions can be harmfulto one's market share and profit margins. The customers of the acquiringbank (merchants) will demand the best rates and service or they willswitch to someone who can deliver.

[0010] In actual business practice, there can be variations andexceptions to the above described process. For example, the acquiringbank and the issuing bank may be one in the same and card associationmay be left out of the transaction processes. Moreover, the acquiringbank and issuing bank often contract out one or more of the abovesupport functions to third party processors or service providers. Theprocessors operate and function on behalf of the bank to complete thetransaction for the merchant and cardholder. The third party processorsbring hardware and software expertise that can help the acquiring bankand issuing bank operate more efficiently, with lower costs, and fewererrors.

BRIEF DESCRIPTION OF THE DRAWINGS

[0011]FIG. 1 is a block diagram of an electronic data transactionprocessing system;

[0012]FIG. 2 is a block diagram of the transaction processing center ofFIG. 1;

[0013]FIG. 3 is a block diagram illustrating the operation of thetransaction processing center;

[0014]FIG. 4 is a block diagram illustrating the data processing withthe incoming queue and outgoing queue;

[0015]FIG. 5 is a flowchart of the operation of data processing functionin FIG. 4;

[0016]FIG. 6 is a block diagram of the plurality of currencies used bythe transaction processing center;

[0017]FIG. 7 is a flowchart of the operation of the currency conversionsof FIG. 6;

[0018]FIG. 8 is a block diagram of the scheduler and event processor forthe transaction processing center; and

[0019]FIG. 9 is a flowchart of the operation of the scheduler and eventprocessor.

DETAILED DESCRIPTION OF THE DRAWINGS

[0020] A transaction processing system 10 is shown in FIG. 1.Transaction processing system 10 is applicable to many types ofelectronic transactions, including financial, reservations, and anyother transaction involving the transfer of data. In the presentdiscussion, transaction processing system 10 will be described in termsof a credit card transaction between a cardholder and a merchant andwill include the financial institution(s) operating between theseparties.

[0021] Transaction processing system 10 is used in many financialtransactions involving purchase of goods and services by credit card orother electronic transfer of funds. Consumers use credit cards topurchase goods and services from merchants and service providers.Businesses and government agencies use electronic fund transfers toacquire goods and services and issue credit cards to employees asnecessary to conduct business.

[0022] Transaction processing system 10 is a computer-basedcommunication and transaction processing network with electronic linksbetween parts of the system. Each of the communication links describedherein can be direct hard-wired lines, leased high bandwidth lines,telephone lines, fiber optic cable, wireless, satellite, or the like.

[0023] Transaction processing system 10 includes a relationship betweencardholder 12 and issuing bank 14. Cardholder 12 can be an individual,corporation, or other legal entity that establishes a line of creditwith issuing bank 14 based on their credit rating and credit risk.Issuing bank 14 issues a credit card or other credit instrument tocardholder 12. Cardholder 12 has the ability to purchase goods andservices and otherwise pay debts using the credit card, within thelimits imposed by issuing bank 14. Issuing bank 14 assumesresponsibility to make good on any charge or debt properly incurred bycardholder 12 within established credit limits. Cardholder 12 agrees topay the amount due on the credit card statement, or minimum portionthereof with interest on the balance, to issuing bank 14.

[0024] With credit card in hand, cardholder 12 can conduct business andmake purchases with most business entities. For example, cardholder 12can enter the place of business of merchant 20 and purchase goods orservices with the credit card. Alternately, cardholder 12 may makepurchases over the telephone or on-line via merchant 20's internetwebsite. FIG. 1 illustrates the interactive commercial relationshipbetween cardholder 12 and merchant 20 by link 22.

[0025] Cardholder 12 makes his or her purchase selection(s) and providesthe credit card to merchant 20. Merchant 20 swipes the credit cardthrough a terminal to read the information stored on the magnetic strip,or enters the credit card number into the terminal keypad, or calls-inthe credit card number by telephone into a processing center. Themerchant's terminal is connected to acquiring bank 24 by electroniccommunication link 26.

[0026] Merchant 20 has an account or relationship with acquiring bank24. A transaction between cardholder 12 and merchant 20 involves thetransmission of data from merchant 20 to acquiring bank 24 by way ofcommunication link 26. The transaction data includes (1) identificationand other information related to cardholder 12 as read from the magneticstrip on the back of the credit card, (2) identification and otherinformation related to merchant 20, and (3) the amount of the purchaseor transaction. The cardholder information may include name, address,primary account number, PIN number, fraud protection data, etc. Thetransmission of data is encrypted to prevent fraud and unauthorizedaccess to sensitive and confidential information related to cardholder12 and merchant 20.

[0027] Acquiring bank 24 processes the transaction by making a record inits computer database, and possibly re-formatting the data or addingadditional information according to its own procedures. Acquiring bank24 may use a third party processor for some or all of its transactionprocessing functions. In the present example, the transaction is routedto transaction processing center 30 over communication link 32. In otherapplications, merchant 20 may have a direct relationship withtransaction processing center 30 as shown by communication link 28.

[0028] Transaction processing center 30 is a third party serviceprovider that acts for or on behalf of acquiring bank 24 or merchant 20as an interface to credit card association 34. The role and function oftransaction processing center 30 will be further discussed below.Transaction processing center 30 processes the transaction and routesthe processed transaction over communication link 36 to card association34. Card association 34 includes well-known institutions identified bynames such as Visa and MasterCard. Card association 34 operates betweenacquiring bank 24 and issuing bank 14 to coordinate and simplify thelarge number of credit card transactions occurring on a daily basis.

[0029] Card association 34 routes the transaction to issuing bank 14over communication link 40. FIG. 1 assumes that the similar activitiesand operation of a transaction processing center like 30 areincorporated within issuing bank 14. In an alternate embodiment, a thirdparty transaction processing center can be positioned between issuingbank 14 and card association 34 to provide some or all of the featuresdescribed for transaction processing center 30.

[0030] Issuing bank 14 has primary authority and assumes the principalrisk of approving and settling the transaction. Issuing bank 14processes the transaction and routes the response back throughcommunication link 40 to card association 34. Card association 34 routesthe response from issuing bank 14 back through communication link 36 totransaction processing center 30, which in turn communicates the issuingbank's response back to acquiring bank 24 by communication link 32.Merchant 20 receives the issuing bank's response to the transaction fromacquiring bank 24 by communication link 26.

[0031] As mentioned, there are variations to the above process. By wayof example, in certain situations and with certain arrangements,transaction processing center 30 may communicate directly with issuingbank 14 as shown by communication link 44. Transaction processing center30 may receive a transaction generated by merchant 20 and respond backto acquiring bank 24 by communication link 46 or directly back tomerchant 20 by communication link 28. In communicating directly withmerchant 20, transaction processing center 30 may assume part or all ofthe authority and have procedures in place to accept the risk andresponsibility for approving and processing the credit card transaction.In addition, third party service providers can operate at many pointsalong the transaction processing route. Nonetheless, even given theseand other variations on a central theme, in most cases, the basic creditcard transaction process remains as described above.

[0032] As an illustration of transaction processing system 10, assumecredit card transaction A is defined as cardholder 12 being anindividual and citizen from the United Kingdom (UK) traveling in theUnited States (US) on business and making a purchase from a merchant ina US city. Issuing bank 14 is a UK national bank and acquiring bank 24is a US national bank. Transaction processing center 30 is a third partyservice provider with communication links to acquiring bank 24 and cardassociation 34 as described above. Card association 34 sits betweenissuing bank 14 and transaction processing center 30. Transactionprocessing center 30 operates on behalf of acquiring bank 24 andmerchant 20 as an interface to card association 34.

[0033] In credit card transaction A, cardholder 12 enters the place ofbusiness of merchant 20 with credit card in hand to purchase goods orservices. Cardholder 12 makes his or her purchase selection(s) andprovides the credit card to merchant 20. Merchant 20 swipes the creditcard through a terminal to read the information stored on the magneticstrip. At this point in the process, where cardholder 12 is directlyinteracting with merchant 20, the transaction is a purchaseauthorization request. The purchase authorization checks to see that thecardholder is in good-standing with the bank, that the purchase iswithin his or her approved credit limit, and that there are no otherirregularities. No monies change hands or accounts between cardholder 12and merchant 20 at the point of sale. Instead, merchant 20 is simplyrequesting authorization for the amount of the purchase. Often times,merchant 20 does not know, understand, or even care who or what isapproving the authorization. Merchant 20 just wants the purchaseauthorization to come back fast and be approved. The obligation andreputation of the financial entity identified on the credit card orother entity who assumes the risk of the transaction gives merchant 20confidence that payment is in fact forthcoming.

[0034] The purchase authorization request includes (1) identificationand other information related to cardholder 12 as read from the magneticstrip on the back of the credit card, (2) identification and otherinformation related to merchant 20, and (3) the amount of the purchaseor transaction. The cardholder information may include name, address,primary account number, PIN number, fraud protection data, etc. Thepurchase authorization request is encrypted to prevent fraud andunauthorized access to sensitive and confidential information related tocardholder 12 and merchant 20.

[0035] The purchase authorization request is routed across communicationlink 26 to acquiring bank 24. Acquiring bank 24 processes the request bymaking a record in its computer database, and possibly re-formatting theauthorization request or adding additional information according to itsown procedures. The purchase authorization request is routed totransaction processing center 30 over communication link 32. Transactionprocessing system 30 routes the purchase authorization request overcommunication link 36 to card association 34. Card association 34forwards the purchase authorization request to issuing bank 14 bycommunication link 40. Issuing bank 14 then approves or denies thepurchase authorization for the requested amount and routes the approvalor denial back through card association 34, transaction processingcenter 30, and acquiring bank 24 to merchant 20 in the reverse orderpreviously described. If the purchase authorization is approved,cardholder 12 and merchant 20 complete their transaction. Cardholder 12leaves the store with the merchandise and a record of the transactionand merchant 20 receives assurance that the money will be paid. If thepurchase authorization request is denied, cardholder 12 can offeranother form of payment or forego the purchase.

[0036] The authorizing institution is typically issuing bank 14,although acquiring bank 24 or transaction processing center 30 mayassume that role in certain circumstances and under certain arrangementsin which it chooses to bear the responsibility and risk of the creditcard transaction. For example, transaction processing center 30 mayrespond directly to the authorization request back to acquiring bank 24over communication link 46. Acquiring bank 24 would then notify merchant20. Alternately, the purchase authorization request from merchant 20 maygo directly to transaction processing center 30 by communication link 28for approval. Transaction processing center 30 would approve or deny thepurchase authorization request and send the approval or denial back tomerchant 20 over communication link 28.

[0037] Clearing and settlement is another type of transaction that canbe processed through transaction processing system 10. The transfer andexchange of money, sometimes in different currencies, can be a timeconsuming, expensive, and error prone process. The aggregation ofpurchases and payment of net proceeds to the parties during clearing andsettlement is a more efficient and cost effective alternative toexchanging money for each transaction. Clearing and settlement may occurat the end of the day, or at regular intervals during the day, or onceevery few days depending on the volume of transactions and needs of theparties.

[0038] In clearing and settlement, monies actually exchange hands byelectronic transfer between accounts to complete previously approved butas of yet unsettled transactions. A number of purchase authorizationrequests like transaction A are approved throughout the day or otherperiods of time as determined by merchant 20 or acquiring bank 24.During clearing and settlement, an aggregation of the individualpurchase requests is processed through transaction processing system 10to fund previously approved transactions.

[0039] Merchant 20 initiates a clearing and settlement transaction inmany cases at the end of the business day. The clearing and settlementtransaction includes and represents specific credit card transactions,including transaction A, which have been approved and accrued since thelast clearing and settlement transaction. The clearing and settlementtransaction is routed from merchant 20 to acquiring bank 24 bycommunication link 26. If merchant 20 is a large institution, or ifmerchant 20 has special arrangements with acquiring bank 24, thenacquiring bank 24 may forward the single clearing and settlementtransaction for merchant 20 to transaction processing center 30.Alternatively, acquiring bank 24 may accumulate a number of clearing andsettlement transactions from smaller merchants before forwarding anaggregate clearing and settlement transaction to transaction processingcenter 30.

[0040] Transaction processing center 30 processes the clearing andsettlement transaction and forwards the processed transaction to cardassociation 34. Card association 34 accumulates clearing and settlementtransactions from a number of sources, e.g. other acquiring banks orother transaction processing centers, which are intended for eachissuing bank. The clearing and settlement transaction from merchant 20intended to clear and settle transaction A, along with othertransactions from merchant 20 and from other merchants and from otheracquiring banks, each intended for issuing bank 14, are accumulated,sorted, processed, and routed to issuing bank 14 by card association 34.

[0041] Issuing bank 14 reviews the aggregate clearing and settlementtransaction from card association 34 and, if all is in order with thepre-approved authorization requests, executes a wire transfer of funds,or authorizes deduction from accounts established within cardassociation 34, for payment of the specific approved transactions madeduring the clearing and settlement period with merchants that havetransacted with cardholders using credit cards issued by issuing bank14. In other words, the funds paid by issuing bank 14 will be sufficientto cover payments which card association 34 must make to specificacquiring banks to cover monies due to merchants for authorizedpurchases made by cardholders using credit cards issued by issuing bank14. Issuing bank 14 sends credit card statements on a periodic basis,e.g. monthly, to its cardholders for the purchases made during theperiod as shown by link 48. Issuing bank 14 assumes the risk whether thecardholder will pay the bill. Issuing bank 14 earns its revenue fromfees and interest charges received from cardholders on any unpaidbalance due on the statements.

[0042] The issuing banks belonging to card association 34 make paymentthereto to clear and settle specific pre-approved outstandingtransactions. Card association 34 then makes payments to specificacquiring banks with the funds received from the issuing banks. One ofthose payments from card association 34 will go through transactionprocessing center 30 to acquiring bank 24. Acquiring bank 24 thencredits the account of merchant 20 for transaction A. That is, a portionof the payment made by card association 34 to acquiring bank 24 by wayof transaction processing center 30 will be used to pay merchant 20 fortransaction A.

[0043] A principal function of card association 34 is to act as afunding clearing house for clearing and settlement. Issuing bank 14 mayneed to pay monies to a large number of acquiring banks, and acquiringbank 24 may expect to receive monies from a large number of issuingbanks. By operating through card association 34, issuing bank 14 makesone wire transfer or authorization to debit its account to cardassociation 34 who in turn makes payments to specific acquiring banks.Likewise, acquiring bank 24 receives one wire transfer from cardassociation 34 to settlement transactions for specific issuing banks.

[0044] Yet another type of transaction that can be processed throughtransaction processing center 30 is a purchase authorization requestwhich automatically triggers clearing and settlement at the end of theday or other time interval without any further post authorizationtransaction. Transaction processing center 30 can be set up to keeptrack of each purchase authorization request, which will includeclearing and settlement data. At a predetermined interval, transactionprocessing center 30 will automatically generate a process to clear andsettle some or all of the outstanding purchase authorization requests.The automatic clearing and settlement can also be initiated in or bycard association 34.

[0045] The activities and operation of transaction processing center 30will now be discussed in further detail. As shown in FIG. 1, transactionprocessing center 30 is positioned between acquiring bank 24 and cardassociation 34. Transaction processing center 30 uses direct electroniccommunication links with acquiring bank 24 and card association 34, andin some applications directly with merchant 20 and issuing bank 14.Transaction processing center 30 can be a third party service provideras shown in FIG. 1 operating on behalf of and providing services foracquiring bank 24, or the activities and operation of transactionprocessing center 30 can be incorporated within acquiring bank 24 oreven merchant 20.

[0046] Transaction processing system 10 has been and will be describedin terms of a credit card transaction for the purpose of illustration.Transaction processing system 10 is also applicable to any type oftransaction involving the transfer and processing of data. For example,transaction processing system 10 could be utilized in airline, hotel,rental car, and ticketing reservation systems. Transaction processingsystem 10 has applications in manufacturing and supply chain management.

[0047] Turning to FIG. 2, transaction processing center 30 is shown toinclude two data processing channels. A first data processing channel isintended for message-based transactions, such as purchase authorizationrequests and other messages where time and speed are of the essence.Authorization process 52, data storage device 54 and authorizationprocess 56 are shown as exemplary data processing functions in the firstdata processing channel. It is understood that other data processingfunctions could be implemented in the first data processing channel. Asecond data processing channel is intended for file-based transactions,such as clearing and settlement and reports. Post authorization process60, data storage device 54 and post authorization process 62 are shownas exemplary data processing functions in the second data processingchannel. It is understood that other data processing functions could beimplemented in the second data processing channel. The first and seconddata processing channels each provide a number of data processingfunctions, such currency conversions in any one of a plurality ofselectable currencies.

[0048] Transaction processing center 30 further includes data transferprocess 50 having a first portion and a second portion. A transaction orother data from acquiring bank 24 (or from merchant 20) is received oncommunication link 32 (or communication link 28) and processed throughthe first portion of data transfer process 50 labeled as 50 a. Datatransfer process 50 a separates message-based transactions, such aspurchase authorization requests, from file-based transactions, suchclearing and settlement and reports, for processing in their respectivedata processing channels through transaction processing center 30.

[0049] A transaction determined to be a purchase authorization requestis routed from data transfer process 50 a through a purchaseauthorization channel including authorization process 52, data storagedevice 54, and authorization process 56. Authorization process 52performs parsing and formatting of the purchase authorization requestfor local storage in data storage device 54. Authorization process 52may also perform other data processing functions such as currencyconversion, reporting, error checking, and other administrativefunctions on the purchase authorization request. The purchaseauthorization request is stored in data storage device 54 for reporting,account reconciliation, and general record keeping and transactionvisibility. Data storage device 54 is a high capacity relationaldatabase utilizing a mass storage medium such as a hard disk drive,optical drive, or the like. The purchase authorization request is thenrouted through authorization process 56 where the request is formattedand any additional information added to the authorization request asnecessary for transfer to card association 34. The second portion ofdata transfer process 50 labeled as 50 b sends the properly formattedpurchase authorization request to card association 34 by way ofcommunication link 36. Data transfer process 50 b may send the properlyformatted purchase authorization request directly to issuing bank 14 byway of communication link 44.

[0050] The reverse process holds true for responses from issuing bank 14to the purchase authorization request. The response from issuing bank 14is forwarded by card association 34 to transaction processing center 30.A transaction determined to be a response to a purchase authorizationrequest is routed from data transfer process 50 b through the purchaseauthorization channel. Authorization process 56 performs parsing,formatting, currency conversion, reporting, error checking, and otheradministrative functions for the response to the purchase authorizationrequest prior to local storage in data storage device 54. The responseto the purchase authorization request is stored in data storage device54 for reporting, account reconciliation, and general record keeping andtransaction visibility. The response to the purchase authorizationrequest is then routed through authorization process 52 where therequest is formatted and any additional information added to theresponse for transfer to acquiring bank 24 or merchant 20. Data transferprocess 50 a sends the properly formatted response to the purchaseauthorization request to acquiring bank 24 or merchant 20.

[0051] The aforedescribed purchase authorization channel throughtransaction processing center 30 is a dedicated communication link thatis always open and active to provide for fast processing of purchaseauthorization requests. In a practical, real-time system, the purchaseauthorization request sent by merchant 20 must (1) traverse acquiringbank 24, transaction processing center 30, and card association 34 toissuing bank 14, (2) be approved or denied by issuing bank 14, and (3)be sent back through card association 34, transaction processing center30, and acquiring bank 24 to merchant 20, all within a matter of secondsto meet the expectations of cardholder 12 and merchant 20. If thepurchase authorization request is perceived to be excessively timeconsuming, cardholder 12 and merchant 20 may become discouraged fromusing a credit card for the purchase of goods and services. Thus, aquick purchase authorization request approval time is important to thesuccess of transaction processing system 10. If the authorizationprocess takes too long, cardholder 12 could become reluctant to usingthe convenience and safety of a credit card. Merchant 20 could losesales from buyers who are inclined to make purchases with a credit card.The issuing bank and acquiring bank could lose interest and fees derivedfrom each credit card transaction.

[0052] As previously discussed, transaction processing center 30 alsoprocesses clearing and settlement transactions for acquiring bank 24 andmerchant 20. The clearing and settlement transaction is proceduraldifferent than the purchase authorization request and therefore is shownwith its own processing channel. Whereas the purchase authorizationprocess is a real-time, message-based transaction with speed of theessence, the clearing and settlement transaction is typically afile-based transaction processed as a batch file of multipletransactions where time is not a critical factor.

[0053] Data transfer process 50 separates message-based transactions,such as purchase authorization requests, from file-based transactions,such clearing and settlement, for processing in their respective dataprocessing channels through transaction processing center 30. Datatransfer process 50 may examine different attributes or features todetermine whether a transaction is message-based or file-based. Forexample, message-based transactions have structural and formattingdifferences from file-based transaction. In other situations, the methodor mode of receipt of the transaction will indicate whether it ismessage-based or file-based.

[0054] A transaction determined by data transfer process 50 a to be aclearing and settlement process is routed through a file-based dataprocessing channel including post authorization process 60, data storagedevice 54, and post authorization process 62. Post authorization process60 performs parsing and formatting of the clearing and settlementtransaction for local storage in data storage device 54. Postauthorization process 60 may also perform other functions such ascurrency conversion, reporting, error checking, and other administrativefunctions on the clearing and settlement transaction. The clearing andsettlement transaction is stored in data storage device 54 forreporting, account reconciliation, and general record keeping andtransaction visibility. The clearing and settlement transaction is thenrouted through post authorization process 62 where the request isformatted and any additional information added to the transaction asnecessary for transfer to card association 34. Data transfer process 50b sends the properly formatted clearing and settlement transaction tocard association 34 by way of communication link 36. Data transferprocess 50 b may send the properly formatted clearing and settlementtransaction directly to issuing bank 14 by way of communication link 44.

[0055] The reverse process holds true for responses from issuing bank 14to the clearing and settlement transaction. The response from issuingbank 14 to the clearing and settlement transaction may be a wiretransfer of funds or authorization for card association 34 to debit theissuing bank's account and forward funds to transaction processingcenter 30. The funds are in turn sent to acquiring bank 24 to credit theaccount of merchant 20 for purchases made by cardholder 12. Anytransaction determined by data transfer process 50 b to be a response toa clearing and settlement transaction is routed from data transferprocess 50 b to post authorization process 62. Post authorizationprocess 62 performs parsing, formatting, currency conversion, reporting,error checking, and other administrative functions for the response tothe clearing and settlement transaction prior to local storage in datastorage device 54. The response to the clearing and settlementtransaction is stored in data storage device 54 for reporting, accountreconciliation, and general record keeping and transaction visibility.The response to the clearing and settlement transaction is then routedthrough post authorization process 60 where the response is formattedand any additional information added to the response for transfer toacquiring bank 24 and finally to merchant 20. Data transfer process 50 asends the properly formatted response to the clearing and settlementtransaction to acquiring bank 24 or merchant 20.

[0056] Transaction processing center 30 is shown in FIG. 2 to includeauthorization processes 52 and 56 for processing purchase authorizationrequests as one type of message-based transaction and post authorizationprocesses 60 and 62 for processing clearing and settlement as one typeof file-based transaction. Authorization processes 52 and 56 are readilyexpandable to handle other types of data processing functions for othermessage-based transactions. Likewise, post authorization processes 60and 62 are readily expandable to handle other types of data processingfunctions for other file-based transactions.

[0057] Acquiring bank 24, issuing bank 14, and card association 34 maysend administrative transactions back and forth through transactionprocessing center 30. The administrative transactions include reports,account reconciliation, refunds, charge-backs, inquiries, errormessages, and other administrative functions. A transaction determinedby data transfer process 50 a to be an administrative transaction can berouted to either authorization process 52 or to post authorizationprocess 60 depending on whether the administrative transaction ismessage-based or file-based. If the administrative transaction isfile-based, post authorization process 60, operating in its expandedrole, performs parsing and formatting of the administrative transactionfor local storage in data storage device 54. The administrativetransaction is stored in data storage device 54 for reporting, accountreconciliation, and general record keeping and transaction visibility.

[0058] In some cases, the administrative transaction is processed andsent back to the initiator. For one example, merchant 20 may request areport of transactions incurred over some period of time which isgenerated by transaction processing center 30 from the data stored indata storage device 54. The report is then sent back to merchant 20. Inanother example of a message-based transaction which is processedthrough authorization processes 52 and 56, operating in their expandedrole, acquiring bank 24 may request a current quote on currency exchangerates being applied by transaction processing center 30. Again, thequote is generated and returned to acquiring bank 24.

[0059] Other times the administrative transaction must be forwarded tocard association 34. For example, cardholder 12 may return themerchandise and merchant 20 must process a refund. In another example,acquiring bank 24 may detect an error during account reconciliation andrequest a correction by card association 34. In such cases, theadministrative transaction is then routed through post authorizationprocess 62 (or, if message-based, through authorization process 56)where the request is formatted and any additional information added tothe transaction as necessary for transfer to card association 34. Datatransfer process 50 b sends the properly formatted administrativetransaction to card association 34 by way of communication link 36. Insome cases, card association 34 will handle the administrativetransaction and, in other cases, card association 34 will forward thetransaction to issuing bank 14. Data transfer process 50 b may send theproperly formatted administrative transaction directly to issuing bank14 by way of communication link 44.

[0060] The reverse process holds true for responses from cardassociation 34 or issuing bank 14 to the administrative transaction. Anytransaction determined by data transfer process 50 b to be a response toan administrative transaction is routed from data transfer process 50 bto post authorization process 62 (or authorization process 56). Postauthorization process 62 performs parsing, formatting, reporting, errorchecking, and other administrative functions for the response to theadministrative transaction prior to local storage in data storage device54. The response to the administrative transaction is stored in datastorage device 54 for reporting, account reconciliation, and generalrecord keeping and transaction visibility. The response to theadministrative transaction is then routed through post authorizationprocess 60 (or authorization process 52) where the response is formattedand any additional information added to the response for transfer toacquiring bank 24 and finally to merchant 20. Data transfer process 50 asends the properly formatted response to the administrative transactionto acquiring bank 24 or merchant 20.

[0061] A simplified representation of transaction processing center 30,including data transfer process 50 a and 50 b (collectively referred toas data transfer process 50), is shown in FIG. 3. Data source 70represents the incoming transactions and data from acquiring bank 24 ormerchant 20. For a message-based transaction, the type of message orcontents of the message or the mode of receipt determines the dataprocessing path through transaction processing center 30. For example, apurchase authorization request is a type of message that, because of itsneed for speedy processing, is handled by data transfer process 50 andtransaction processing center 30 in a time critical manner.Message-based data, such as the purchase authorization request, isrouted directly through the message-based data processing channel 72 oftransaction processing center 30. In the case of the purchaseauthorization request, the message-based data processing is immediatelyrouted through the open and active processing channel comprisingauthorization processes 52 and 56 and data storage device 54. Thepurchase authorization request information is rapidly processed withintransaction processing center 30, including any necessary parsing,formatting, currency conversion, reporting, error checking, datastorage, and other administrative functions.

[0062] Another example of message-based data processing is one that iscontrolled by the contents of the message such as a high priorityrequest for currency exchange rates. Since exchange rates may changerapidly in real-time, it is important to get a quick response to havethe most up-to-date and accurate information.

[0063] Message-based data processing channel 72 will rout the data beingprocessed to data destination 74 which may be card association 34 orissuing bank 14. Alternatively, data destination 74 can be acquiringbank 24 or merchant 20 if the message-based data processing is intendedto return to the initiator.

[0064] Another feature of data transfer process 50 is shown asfile-based data processing channel 76. If the data received from datasource 70 is a file, then information contained in or attributesassociated with the file determine the processing path for the data inthe file. For example, the file may contain a field that includes a filenumber. The file number will determine how the data in the file is to beprocessed through transaction processing center 30. Alternatively, thefile may contain a status field which will determine how the data in thefile is to be processed through transaction processing center 30. Otherattributes of the file such as its file name or file extension or typeof file or date of creation or owner of the file or size of the file canbe used to determine how the data in the file is to be processed throughtransaction processing center 30. As further explained in FIG. 5 andassociated text, file-based data processing channel 76 receives a filefrom data source 70 and uses the file contents or attributes todetermine how the data in the file is to be processed throughtransaction processing center 30. The processed data is routed to datadestination 74.

[0065] The block diagram shown in FIG. 3 also applies to the reversepath through transaction processing center 30. In this case, data source50 represents card association 34 or issuing bank 14 and datadestination 74 represents acquiring bank 24 or merchant 20.Message-based data transfers are processed and routed throughmessage-based data processing channel 72 of transaction processingcenter 30 based on the type or contents of the message. File-based datatransfers are processed and routed through file-based data processingchannel 76 of transaction processing center 30 based on the contents orattributes of the file.

[0066] File-based data processing channel 76 is shown in FIG. 4. Datasource 70 and data destination 74 operate as described for FIG. 3. Filesfrom data source 70 are placed in incoming queue 80. The files can beplaced in incoming queue by data source 70 loading the files into thequeue when available or by transaction processing center 30 checking theacquiring bank's server on a regular basis for transaction filesavailable over a file transfer protocol (FTP) connection.

[0067] Incoming queue 80 contains a register or stack that canaccommodate any size file, within the data storage capacity oftransaction processing center 30. Incoming queue 80 will contain one ormore variable length files with associated start and stop locations foreach file. Incoming queue 80 will not necessarily know or understand thecontents of the files. Each record or location in incoming queue 80 willbe a file. The files can be different sizes and types. A file cancontain many different data formats and have many specific functions.Some files may be formatted according to one of the Visa file formatsand then transferred across communication link 32 or 28 over an FTPconnection. Other files may be formatted according to one of theMasterCard file formats and then transferred across communication link32 or 28 over a secure socket layer (SSL) connection. A file can be anaggregation of clearing and settlement transactions from acquiring bank24 from many different merchants. A clearing and settlement transactionfile will contain one or more individual transactions from one or moremerchants. Each clearing and settlement transaction may contain creditcard number and other information related to the cardholder, identityand information related to the merchant, and the amount of thetransaction. A file can contain a request for a report by acquiring bank24 or merchant 20. A file can also contain account reconciliationrequests or error corrections or refund transactions or administrativefunctions.

[0068] Data processing 82 represents one or more computer systems eachwith one or more central processing units (CPUs) and each operatingsoftware to control access to incoming queue 80. Each CPU can beoperating a different process. Data processing 82 may be one or moreservers local to transaction processing center 30 or it may bedistributed to multiple computer systems with communication links toremote locations. Data processing 82 sends and receives data from datastorage device 54. The software operating on the one or more CPUs ofdata processing 82 will examine incoming queue 80 and retrieve files forprocessing based on the contents of the file or attributes of the file.For example, a first CPU in data processing 82 may query incoming queue80 looking for files or groups of files containing a certain file numberor status. Files with file number 100 may be clearing and settlementtransactions which the first CPU will process accordingly. A second CPUin data processing 82 may query incoming queue 80 looking for files orgroups of files having certain file extensions or creation dates orother file attributes. Files with a file extension of say “.REQ” may bea request for a report. The second CPU processes the request for reportand forwards the report to the requester.

[0069] The CPUs of data processing 82 may be dedicated to processingcertain types of files or they may share responsibilities. The CPUs ofdata processing 82 which are idle, i.e. no primary files to process, canbe temporarily re-assigned to processing other types of files on asecondary basis until some primary files need to be processed.Alternately, a prioritization scheme can be established such that eachCPU in data processing 82 in turn takes the next file or group of filesfrom incoming queue 80 based on the hierarchy of the prioritizationscheme. The CPUs will be fully utilized, each backing up the other formaximum data throughput.

[0070] Data processing 82 processes the data with each file according toits procedures and the contents of the file. In the above example of aclearing and settlement transaction file, data processing 82 parses thedata, perform currency conversions and error checking, adds information,reformats data as necessary, and performs other administrativefunctions. Data processing 82 will access data storage device 54 asnecessary to perform the data processing function. A process in dataprocessing 82 will then place the processed clearing and settlementtransaction data file in outgoing queue 84. In a similar manner for thereport request file, data processing 82 parses the data, retrieves datafrom data storage device 54, performs error checking, adds information,reformats data as necessary, and performs other administrativefunctions. Data processing 82 then places the processed report file inoutgoing queue 84.

[0071] The files in outgoing queue 84 may be transferred to datadestination 74 in a variety of ways. Transaction processing center 30may send the files by way of one of its communication links to datadestination 74. Alternatively, data destination 74 may initiate thetransfer after receiving a notice of “file ready for transfer”instruction from transaction processing center 30. Data destination 74may poll or query outgoing queue 84 at predetermined times or after agiven time since the original request file was placed in incoming queue80. In other embodiments, incoming queue 80 may physically reside atdata source 70 and outgoing queue 84 may physically reside at datadestination 74. In this case, data processing 82 would access the filesstored in incoming queue 80 on data source 70's server. Data processing82 then places processed files in outgoing queue 84 on data destination74's server.

[0072]FIG. 5 illustrates the steps involved in the operation offile-based data processing channel 76. Step 86 stores files from datasource 70 in incoming queue 80. Step 88 selects a file from incomingqueue 80 based on the contents or attributes of the file. Step 90processes data from the file through data processing 82. Step 92 storesthe processed data from data processing 82 in an outgoing file. Step 94stores the outgoing file in outgoing queue 84 for access by datadestination 74. Step 96 provides first and second CPUs in dataprocessing 82. Step 98 utilizes the first CPU to select the file fromincoming queue 80 based on a first selection criteria. The firstselection criteria may involve selecting files or groups of filescontaining a certain file number or status or other contents of thefile. Step 102 utilizes the second CPU to select the file to be placedinto outgoing queue 84 based on a second selection criteria. The secondselection criteria may involve selecting files or groups of files basedon file name extension or other file attribute.

[0073] The operation of file-based data processing channel 76 simplifiesthe data processing through transaction processing center 30. Incomingqueue 80 allows many types of files to be received and made availablefor processing without knowledge of the complexity, structure, orfunction associated with each type of file. Data processing 82 canoperate with multiple CPUs. Each CPU can be operating the same softwarewhich is configurable to query and access files in incoming queue 80according to many file processing protocols, e.g. dedicated fileprocessing responsibilities, or hierarchical processing based on someprioritization scheme, or any other file processing ordering. Therefore,the structural and functional knowledge associated with incoming queue80 is minimal. Data source 70 need not be concerned with interfacingwith data processing 82. Data source 70 need only place a data file inincoming queue 80. Incoming queue 80 may know it has one or more filesstored in its stack, but has no idea of the contents, structure, orfunction of the files. The CPUs of data processing 82 need not beconcerned with interfacing with a number of requesters and data sources.The CPUs interface only with incoming queue 80. The CPUs simply queryincoming queue 80 and access the file or group of files based onpredefined file processing protocols.

[0074] Likewise, outgoing queue 84 allows many types of files to bereceived and made available for processing without knowledge of thecomplexity, structure, or function associated with each type of file.Each CPU can be operating the same software which is configurable toplace processed files in outgoing queue 84 according to many fileprocessing protocols, e.g. hierarchical processing based on someprioritization scheme or any other file process ordering. Therefore, thestructural and functional knowledge associated with outgoing queue 84 isminimal. Data destination 74 need not be concerned with interfacing withdata processing 82. Data destination 74 need only extract a data filefrom outgoing queue 84. Outgoing queue 84 may know that one or morefiles are stored in its stack, but has no idea of the contents,structure, or function of the files. The CPUs of data processing 82 neednot be concerned with interfacing with a number of data destinations.The CPUs interface only with outgoing queue 84. The CPUs simply placesprocessed files or groups of files into outgoing queue 84 for access bydata destination 74 based on predefined file processing protocols.

[0075] Transaction processing center 30 provides significant flexibilityas to where resources are placed and who requests information andreceives data. The incoming queue and outgoing queue simplify theinterface and processing for data processing 82 as well as for datasource 70 and data destination 74.

[0076] The previous examples have discussed several types of dataprocessing functions that are performed within transaction processingcenter 30. One of the data processing steps that is performed forpurchase authorization requests and for clearing and settlementtransaction within both data processing channels of transactionprocessing center 30 is currency conversion. It is an obvious fact thatcardholder 12 and merchant 20 must deal in a world economy. There aremany countries and many different currencies throughout the world. Thesimple transaction A previously discussed involves at least twocountries, i.e. US and UK, and their respective currencies. Transactionprocessing center 30 provides flexibility as to how, when and by whatexchange rate one currency is converted to another currency, and to whomfees are accessed for the currency conversion.

[0077] Transaction processing center 30 receives timely currencyexchange rates from the financial markets. Currency exchange rate source64 in FIG. 2 represents one or more sources from the financial marketsthat set or monitor currency exchange rates. The most current exchangerates are sent to currency exchange rate importer 66 which parses andformats the currency exchange rates for local storage in data storagedevice 54. The current exchange rates stored in data storage device 54are used for currency conversion as described hereinafter.

[0078]FIG. 6 illustrates a basic block diagram of the logical flow ofthe transaction with a number of currency conversions. Associated withthe entities defined in FIG. 1 there are default settings whichcollectively are used in determining currency conversions. Transactionprocessing center 30 records these settings in its system for use in thecurrency conversion process and assessment of fees associated therewith.Merchant 20 has settings such as the default merchant funding currencywhich define the currency in which he or she would like to be paid andthe default request currency which is the currency of the merchandiseprice quote, i.e. the amount of money that the merchant is expecting toreceive. Acquiring bank 24 has settings such as acceptable exchangerates. Card association 34 has a number of settings and rules by whichit operates. Issuing bank 14 has settings such as mark-up and mark-downfor the monetary values of the transactions.

[0079] Returning to the exemplary transaction A, when merchant 20submits the purchase authorization request directly, or throughacquiring bank 24, to transaction processing center 30 there is arequest currency 120 associated with the purchase amount. Requestcurrency 120 can be any currency denomination selectable by themerchant. Merchant 20 expects to be paid a certain price or amount ofmoney for the merchandise or service being purchased by cardholder 12.Merchant 20 selects request currency 120, or allows cardholder 12 toselect request currency 120, as the stated currency for the price oramount of money that the merchant is expecting to receive. Intransaction A, given that merchant 20 is a US-based business operatingwith a US acquiring bank 24, merchant 20's settings are most likely andassumed to be United States Dollars (USD) for request currency 120.

[0080] Since request currency 120 can be any currency denomination fromany country, a transaction currency 122 is provided and used as abaseline currency for account reconciliation, generating statements,making refunds, reporting functions, funding merchant 20, or processingthrough card association 34 and issuer 14. Many financial institutionsprefer to deal in certain well-established and stable currencies.Certain less stable currencies are difficult and problematic toreconcile and report against. Transaction currency 122 provides a basis,using a well-established currency as a baseline, to make adjustmentsfollowing account reconciliation and provide useful reporting functions.For transaction A with a US-based acquiring bank 24, transactioncurrency 122 is USD. Therefore, since request currency 120 can be anycurrency denomination, transaction currency 122 is a useful step toallow for the flexibility in selecting the request currency whileproviding a vehicle to convert the request currency to one of the moreestablished and accepted transaction currencies for reporting andreconciliation. If necessary, transaction processing center 30 performsa currency conversion from request currency 120 to transaction currency122. Transaction processing center 30 may mark-up or mark-down on themonetary value of the transaction or otherwise access a fee for thecurrency conversion from request currency 120 to transaction currency122 based on the system settings. Since request currency 120 is USD andtransaction currency 122 is USD, there is no need for a currencyconversion.

[0081] At this point in the process, the purchase authorization requestfor transaction A exists in transaction processing center 30 in the formof transaction currency 122. Transaction processing center 30 will beable to store and process data, generate reports, reconcile theaccounts, and perform further administrative processing based ontransaction currency 122 independent of the form of request currency120.

[0082] Transaction processing center 30 also provides clearing currency124 which is selectable in accordance with settings and the desires ofmerchant 20 and acquiring bank 24. Recall from the previous explanationthat card association 34 operates as an intermediary between acquiringbank 24 and issuing bank 14. Card association 34 will interact withissuing bank 14 in the currency defined by the bank identificationnumber (BIN) set up by issuing bank 14 with card association 34. For thepurposes of transaction A, assume the UK-based issuing bank 14 interactswith card association 34 in its native currency, Great Britain PoundsSterling (GBP).

[0083] If transaction processing center 30 were to send the purchaseauthorization request to card association 34 in the form of thetransaction currency, i.e. in USDs, then card association 34 wouldperform a currency conversion to GBP and access cardholder 12 a fee forthe conversion to the benefit of itself and/or issuing bank 14.Transaction processing center 30, and acquiring bank 24 and merchant 20,would have little if any control over the currency conversion made bycard association 34. Card association 34 would profit from any fees andproceeds of exchange rates, including any mark-up or mark-down in themonetary value of the transaction, involved in the currency conversionfrom USD to GBP. Alternately, issuing bank 14 may have a USD-based BINaccount with card association 34 and thereby receive USD from cardassociation 34. In that case, issuing bank 14 would profit from any feesand proceeds of exchange rates involved in the currency conversion fromUSD to its native currency GBP.

[0084] Transaction processing center 30 has the ability to simplify, orat least shift the currency conversion procedure away from cardassociation 34 and issuing bank 14, for the benefit of anyone partneringwith transaction processing center 30, e.g. acquiring bank 24 andmerchant 20. The selectable nature of clearing currency 124 provides thefeature of converting transaction currency 122 to clearing currency 124to match any other currency, including the native currency of issuingbank 14 which in most cases is the same as the billing currency ofcardholder 12, prior to sending the transaction to card association 34.Transaction processing center 30 can establish multiple BINs with cardassociation 34 for clearing currency 124, one for each currency to beused as clearing currency 124.

[0085] For transaction A, with the knowledge of the system settings ofissuing bank 14 and cardholder 12, the purchase authorization request isconverted from transaction currency 122 to clearing currency 124 whichmay be a different currency than transaction currency 122. That is, thepurchase authorization request is converted from USD to GBP bytransaction processing center 30 prior to transfer of the purchaseauthorization request to card association 34. Transaction processingcenter 30 selects the BIN associated with GBP when forwardingtransaction A to card association 34. When the purchase authorizationrequest is received by card association 34, the transaction will beviewed as a conventional transaction in the native currency of the BINfor issuing bank 14, i.e. in GBP, with no need for card association 34to perform any currency conversion or access any fees or make anymark-up or mark-down associated with a currency conversion. Transactionprocessing center 30 may mark-up or mark-down or otherwise access a feeon the monetary value of the transaction for a currency conversion fromtransaction currency 122 to clearing currency 124 based on the systemsettings related to merchant 20, issuing bank 14, acquiring bank 24, andcard association 34.

[0086] The currency conversion from transaction currency 122 to clearingcurrency 124 is performed by transaction processing center 30, which isacting on behalf of acquiring bank 24 and merchant 20, prior to thepurchase authorization request being transferred to card association 34.Merchant 20 is a customer of acquiring bank 24. Although transactionprocessing center 30 may access fees and mark-ups or mark-downs in themonetary value of the transaction based on system settings, transactionprocessing center 30 and acquiring bank 24 will both have a vestedinterest in providing maximum overall value in the transaction formerchant 20. By knowing the mark-up and mark-down of issuing bank 14from its settings, transaction processing center 30 can research theopen financial markets for better rates and provide the best service toits customers, i.e. acquiring bank 24 and merchant 20.

[0087] Prior to transfer to card association 34, the purchaseauthorization request for transaction A exists in transaction processingcenter 30 in the form of clearing currency 124. Transaction processingcenter 30 will transfer the purchase authorization request to cardassociation 34 with the amount of the transaction stated in clearingcurrency 124. The clearing currency 124 is selected to match the nativecurrency of issuing bank 14 and/or the billing currency of cardholder12. In the situation where the native currency of issuing bank 14 isdifferent from the billing currency to cardholder 12, clearing currency124 may be selected to match the billing currency to cardholder 12 toavoid additional fees for currency conversion to the cardholder by theissuing bank or card association. When card association 34 receives thetransaction, the purchase will appear to be a conventional transactionin the native currency of issuing bank 14, or at least the same currencyas defined for the BIN which issuing bank 14 uses to conducttransactions with card association 34.

[0088] For transaction A, clearing currency 124 is GBP. Card association34 requests the purchase authorization request be approved by issuingbank 14 in GBP. Issuing bank 14 checks cardholder 12's credit cardaccount based on the amount of the purchase authorization request inGBP. Issuing bank 14 approves or disapproves the purchase authorizationrequest based on GBP and responds to card association 34. Cardassociation 34 forwards the response to transaction processing center 30with the approval or denial in settlement currency 126 as determined bythe acquiring BIN used by transaction processing center 30 for thetransaction. Settlement currency 126 is that currency which acquiringbank 24 wishes to receive from card association 34. Transactionprocessing center 30 can establish multiple BINs with card association34 for settlement currency 126, one for each currency to be used assettlement currency 126. As a final step, transaction processing center30 converts settlement currency 126 to merchant funding currency 128, ifnecessary. Merchant funding currency 128 is that currency in whichmerchant 20 wants to be paid. For transaction A, transaction processingcenter 30 has set settlement currency 126 and merchant funding currency128 both to USDs at the request of and for the benefit of acquiring bank24 and merchant 20. Therefore, there is no need for a currencyconversion. Merchant 20 receives the approved or denial to the purchaseauthorization request in USD.

[0089] Assume the transaction between cardholder 12 and merchant 20 isapproved and completed, the clearing and settlement of transaction Afollows a similar path through the institutions. Request currency 120for clearing and settlement is USD. Transaction currency 122 forclearing and settlement is USD. Transaction currency 122 is converted toGBP as clearing currency 124. The clearing and settlement transaction issent to card association 34 in clearing currency 124, i.e. GBP. Cardassociation 34 views the clearing and settlement as a transaction inissuing bank 14's native or BIN currency. There is no currencyconversion, fees assessment, mark-up or mark-down by card association34, even though cardholder 12 and merchant 20 are dealing in differentcurrencies. Transaction processing center 30 has handled the currencyconversion on behalf of merchant 20. Card association 34 sends theclearing currency to issuing bank 14. Issuing bank 14 makes a wiretransfer or authorizes debit against its account at card association 34in the currency defined by the BIN used by issuing bank 14. Cardassociation 34 makes a wire transfer or credits the account oftransaction processing center 30 as defined by its BIN. Transactionprocessing center 30 receives monies for settlement of transaction A insettlement currency 126, which is USD in the present example.Transaction processing center 30 converts the monies to merchant fundingcurrency 128 if necessary and forwards the settlement to acquiring bank24 to credit to merchant 20's account or directly to merchant 20. Sincesettlement currency 126 and merchant funding currency 128 are the same,no currency conversion is necessary.

[0090] Now consider a transaction B where cardholder 12 is making apurchase from merchant 20 over the internet. Merchant 20 operates awebsite where merchandise is offered at any currency rate as selected bythe customer. The customer pulls down a selection box on the computerscreen and receives a price quote in the selected request currency. Inthis example, cardholder 12 is a US citizen living in Japan and merchant20 is French company. Acquiring bank 24 is a French national bank.Issuing bank 14 is a US national bank. Cardholder 12 pays US-basedissuing bank 14 is USD. Cardholder 12 selects the price to be paid forthe merchandise on merchant 20's website in Japanese Yen (JPY) tocompare with local competitive pricing. Merchant 20 wants to be paid inEuro Dollars (EUR).

[0091] In FIG. 6, request currency 120 is JPY. Transaction currency 122is EUR for the benefit of acquiring bank 24 and merchant 20. Transactionprocessing center 30 performs the currency conversion from requestcurrency 120 in JPY to transaction currency 122 in EUR. Clearingcurrency 124 is selected to be USD so the transaction appears to be inthe native currency of issuing bank 14 and cardholder 12. Transactionprocessing center 30 performs the currency conversion from transactioncurrency 122 in EUR to clearing currency 124 in USD. Card association 34receives a transaction in USD as the clearing currency. Issuing bank 14authorizes (or settles) the transaction in USD. Transaction processingcenter 30 elects to receive settlement currency 126 from cardassociation 34 in USD so that there is no currency conversion done bycard association 34. Transaction processing center 30 performs acurrency conversion from settlement currency 126 in USD to merchantfunding currency 128 in EUR.

[0092] Merchant 20 should not be assessed any currency conversion feesor mark-ups or mark-downs by card association 34 or issuing bank 14because card association 34 and issuing bank 14 view the entiretransaction as based in its native currency of USD with no currencyconversion needed. Request currency 120, transaction currency 122, andclearing currency 124 allow transaction processing center 30 to controlthe currency conversion on the transaction on the front end of theprocess and extract the most favorable exchange rate from the financialmarkets. Settlement currency 126 and merchant funding currency 128allows transaction processing center 30 to control the currencyconversion on the transaction on the back end of the process and extractthe most favorable exchange rate from the financial markets.

[0093] The BINs set up with card association 34 allow transactionprocessing center 30 to control the points in the transaction wherecurrency conversion will occur. Transaction processing center 30 simplychooses the desired BIN in which to transfer the transaction. Thecurrency conversion occurs by transaction processing center 30 placing acertain value of the transaction, taking into account foreign exchangerates, into the desired BIN. Transaction processing center 30 maymark-up or mark-down or otherwise access a fee on the monetary value ofthe transaction for any currency conversion described above based on thesystem settings. Merchant 20 is expecting to receive the monetary valueof the transaction as quoted in request currency 120 in the form ofmerchant funding currency 128. As a result of the currency conversionsby transaction processing center 30, if merchant 20 receives more thanexpected based on request currency 120, then merchant 20 benefited fromthe currency conversions in the transaction. If merchant 20 receivesless than expected based on request currency 120, then merchant 20 willhave paid a fee from the transaction. The currency conversion process inFIGS. 6 and 7 allows transaction processing center 30 to control thepoints where currency conversion is performed and how and to whom feesare accessed for the currency conversions.

[0094] Acquiring bank 24 and merchant 20 are no longer dependent on cardassociation 34 for the clearing or settlement currency conversions.Instead, the conversion from transaction currency 122 to clearingcurrency 124 and the conversion from settlement currency 126 andmerchant funding currency 128 can be managed and handled by transactionprocessing center 30 on behalf of merchant 20 and acquiring bank 24 andfor the benefit of its partners.

[0095]FIG. 7 illustrates the steps involved in the operation of currencyconversion process. Step 140 receives the credit card transaction frommerchant 20 in request currency 120 which is different from transactioncurrency 122. Step 142 converts request currency 120 to transactioncurrency 122. Step 144 receives a credit card transaction initiated bymerchant 20 having a monetary value stated in transaction currency 122as a baseline value. Step 146 converts transaction currency 122 toclearing currency 124 which is selectable to match the native currencyof issuing bank 14. Step 148 forwards the credit card transaction tocard association 34 and issuing bank 14 with the monetary value of thecredit card transaction in clearing currency 124. Step 150 selectssettlement currency 126 to be received from card association 34. Step152 converts settlement currency 126 to merchant funding currency 128.

[0096] An advantage of having the currency conversion process as shownin FIGS. 6 and 7 is maximum flexibility to configure transactionprocessing system 10 to operate in any manner as requested by acquiringbank 24, if transaction processing center 30 is working for theacquiring bank. The currency conversion can be performed by transactionprocessing center 30, as illustrated in transaction A, where transactioncurrency 122 in USD is converted to clearing currency 124 in GBP so thatcard association 34 received the transaction in the native currency ofissuing bank 14. If acquiring bank 24 or merchant so chooses, thecurrency conversion can be left to card association 34 by leavingclearing currency 124 in USD. The same holds true for transaction B. Onthe settlement side of transaction B, the currency conversion fromissuing bank 14 to the native currency of acquiring bank 24 can behandled by transaction processing center 30 by making clearing currency124 and settlement currency 126 the same currency. Card association 34would not perform any currency conversion. The currency conversion canbe left to card association 34 by leaving settlement currency 124 thesame as merchant funding currency 128. By selecting the currencyconversion points 120-128, transaction processing center 30 can controlthe currency conversion process for the entire transaction.

[0097] To handle the large number and variety of transactions processingthrough transaction processing system 10, transaction processing center30 includes a scheduler and event processor 160 as shown in FIG. 8.Scheduler 160 works in combination with data processing 82 in FIG. 4 toprovide efficient utilization of the resources of transaction processingcenter 30. Scheduler 160 is a computer program or operating systemexecuting on a server or a distributed computer system. The computersystem running scheduler 160 includes one or more CPUs, electronicmemory, hard disk drive, and interfaces to communicate with peripherals.Scheduler 160 uses database 162 residing on a hard disk drive. Database162 is configurable with timing, instructions, and other informationused by servers 164, 166, and 168 which run data processing 82. Database162 includes information such as process identifier, execution interval,polling interval, concurrency requirements, dependencies, and errorchecks.

[0098] Scheduler 160 schedules various processes or client applicationsto run on servers 164-168 and keeps track of the individual runs orexecutions. Assume scheduler 160 is configured to run a clearing andsettlement as a process every 60 minutes. Database 162 would have anentry for a process identifier, say process number 200, for the clearingand settlement process. The time interval is 60 minutes, although thetime interval can be any length of time. The polling interval is set to10 minutes. The clearing and settlement process would typically not haveany concurrency requirements because more than one clearing andsettlement process could potentially run at one time. The clearing andsettlement process may have dependencies that would be recorded in theentry for process number 200 in database 162.

[0099] Server 164 is a computer system operating under the control of aCPU. Server 164 operates a computer program which is enabled orconfigured to run one or more predefined processes. When server 164comes on-line, the software processes configured to run on server 164each in turn query or check in with scheduler 160, identify the process(e.g. process number 200), and requests a task or assignment. A firstprocess running on server 164 will query or check in with scheduler 160and request a task according to its configuration. If there is such atask to be performed, scheduler 160 provides execution instructions tothe first process. If there are no such tasks for the first process,scheduler 160 gives the first process its next time to check in. Asecond process configured to run on server 164 will check in withscheduler 160 and request a task according to its configuration. Ifthere is such a task to be performed, scheduler 160 provides executioninstructions to the second process. If there are no such tasks for thesecond process, scheduler 160 gives the second process its next time tocheck in.

[0100] Assume scheduler 160 gives the first process configured to run onserver 164 the task of running the clearing and settlement process andschedules the execution time in 60 minutes. Scheduler 160 also informsserver 164 that there are no concurrency requirements or no dependenciesand that it should poll or check back with scheduler 160 every 10minutes (poll interval) until execution time. The first process onserver 164 keeps track of the time and polls scheduler 160 every 10minutes to see if any instructions have changed. If the situationchanges, such as a event on transaction processing center 30 or anupdate to database 162, then the first process on server 164 may receiverevised instructions from scheduler 160 at one of the polling times.

[0101] At the appointed execution time, the first process on server 164queries or checks in with scheduler 160 one last time before executingprocess number 200. If all is good to go, server 164 begins executingprocess number 200. Server 164 starts executing the clearing andsettlement process by extracting one or more files from incoming queue80 that have the file number associated with clearing and settlement.The file is parsed and the data is processed. During the execution ofthe clearing and settlement process, server 164 further records or logsin various information and events related to execution of the clearingand settlement process into database 162. For example, server 164records the start time, completion time, and completion of variousstatus check points during the execution of the clearing and settlementprocess into database 162. The status check points can be used for errorcorrection and restart if the process does not complete successfully.When the clearing and settlement process is complete, then server 164notifies scheduler 160 that the task is complete. Scheduler 160 thenassigns server 164 its next task of another clearing and settlementprocess to be run in another 60 minutes with instructions to poll every10 minutes.

[0102] In another embodiment, server 164 may contain a number ofprocesses. Server 164 will check in with scheduler 160 and see wantneeds to be done and then activate the appropriate process. In additionto clearing and settlement, if server 164 were enabled to handlegenerating certain reports, say process number 300, then scheduler 160would be able to give server 164 either process number 200 or processnumber 300 for its next assignment. Thus, when a process checks in forwork, scheduler 160 will assign a task based on the abilities of theprocess and the priority of the work to be done.

[0103] Scheduler 160 tracks and handles concurrency constraints. Someprocesses can run concurrently and others cannot. If a process isconcurrency constrained, i.e. it must execute by itself and finishbefore another like or related process can start, then scheduler 160will hold off such like or related processes until the concurrencyconstrained process finishes. For example, a first accountreconciliation may be concurrency constrained so that a second accountreconciliation cannot run until the first account reconciliation isfinished. Scheduler 160 may allow certain processes to operateconcurrently. For example, first and second reports which are merelyaccessing data, possibly the same data, can be run simultaneously.

[0104] Scheduler 160 can also track and handle dependency constraints.Some processes may be required to wait until another process finishes.For example, the clearing and settlement process may have to wait untilan audit is finished so the underlying data does not change during theaudit. Alternately, an account reconciliation may have to wait for aclearing and settlement to run so that transaction processing center 30has the latest data.

[0105] At times a process might fail to complete. Scheduler 160 waits toreceive a report from server 164 that the assigned task was successfullycompleted. If there is a run problem, then server 164 will record andreport the last known good check point or event. Scheduler 160 analyzeswhat has been done and what still needs to be done so the failed processcan be restarted at the last known good check point without repeatingunnecessary and duplicative steps in the process that might lead toother errors.

[0106] As the work load increases, scheduler 160 supports adding moreprocess resources without the need to reconfigure transaction processingcenter 30. Server 166 is a computer system running a computer programunder the control of a CPU. Server 168 is also a computer system runninga computer program under the control of a CPU. Servers 164, 166, and 168may be local or remote servers in a distributed system. Servers 164-168are configured to run one or more processes on transaction processingcenter 30. Server 164 may be configured to execute a first type ofprocess such as clearing and settlement. Server 166 may be configured toexecute the first type of process and/or a second type of process suchas a report. Server 168 may be configured to execute yet another type ofprocess.

[0107] Assume server 166 comes on-line with a configuration that handlesprocess number 200 and process number 300. Further assume server 168comes on-line with a configuration that handles only process number 300.Servers 166 and 168 communicate with scheduler 160. Scheduler 160 looksin database 162 to see what are the next priority processes for whichservers 166 and 168 are configured to run. Tasks are assigned toprocesses on servers 166 and 168 accordingly with the associatedexecution time and polling interval.

[0108] Assume that at time t₀ server 164 queries or checks in withscheduler 160 and is assigned process number 200 in 60 minutes, e.g. 8pm. At time t₀+5 minutes, server 166 queries or checks in with scheduler160 and is assigned the next process number 200 at 9 pm. At time t₀+10minutes, server 168 queries or checks in with scheduler 160 and isassigned process number 300. At 8 pm, server 164 queries scheduler 160,receives final okay to run, executes the assigned process and completesat 8:20 pm. Server 164 checks in with scheduler 160 to let it know thatthe process number 200 at 8 pm was successfully completed and thatserver 164 is ready for the next task. Scheduler 160 has alreadyassigned the 9 pm time slot for clearing and settlement to server 166.However, there are a number of reports pending on transaction processingcenter 30. Scheduler 160 assigns server 164 to execute a process number300 to run at 8:30 pm in order to get a few reports done since theclearing and settlement is in taken care of for time being.

[0109] Since scheduler 160 hands out tasks as each server 164-168 checksin, there is no need to reconfigure database 162. When server 164 isoperating by itself, it had 100% of the work load. When server 166 comeson-line, it shares the load equally with server 164. The configuredprocesses on servers 164 and 166 have the same capability and, on theaverage, scheduler 160 will use each the same as they query for tasks.When server 168 comes on-line, it will share the load as well but may benot equally with servers 164 and 16.6 because server 168 can only doreports. Nonetheless, the processing capacity of transaction processingcenter 30 is scalable by adding new process resources and servers. Eachnew process shares the work load depending on the tasks to be preformedand the capabilities of the processes. Again, there is no need toreconfigure database 162 with each new process added to transactionprocessing center 30 because scheduler 160 uses the resources on handand distributes the work according to its capability as each processchecks in.

[0110]FIG. 9 illustrates the steps involved in the operation ofscheduler 160. Step 170 provides servers 164, 166, and 168 each havingone or more configured processes. Step 172 initiates first query toscheduler 160 for an execution instruction. Step 174 initiates secondquery to scheduler 160 prior to execution of the process to confirm theexecution instruction. Step 176 executes the process after receivingconfirmation of the execution instruction. Step 178 configures server164 to execute a first type of process. Step 180 configures server 168to execute a second type of process.

[0111] Although the present invention has been described with respect topreferred embodiments, any person skilled in the art will recognize thatchanges be made in form and detail, and equivalents may be substitutedfor elements of the invention without departing from the spirit andscope of the invention. Many modifications may be made to adapt to aparticular situation or material to the teaching of the inventionwithout departing from the essential scope of the invention. Therefore,it is intended that the invention not be limited to the particularembodiments disclosed for carrying out this invention, but that theinvention will include all embodiments falling within the scope of theappended claims.

What is claimed is:
 1. A system for processing financial transactionsbetween first and second parties, comprising: a first financialinstitution issuing a credit instrument to the first party; a secondfinancial institution acquiring a transaction from the second party; anassociation having a communication link to the first financialinstitution for providing data processing services; and a transactionprocessing center operating between the second financial institution andthe association, wherein the transaction processing center includes: (a)a first data processing channel for processing a message-basedtransaction in selectable currencies of a plurality of currencies, and(b) a second data processing channel for processing a file-basedtransaction in selectable currencies of a plurality of currencies. 2.The system of claim 1 further including a data storage device forstoring the processed message-based transaction and the processedfile-based transaction.
 3. The system of claim 2 wherein themessage-based transaction is an authorization request.
 4. The system ofclaim 3 wherein the first data processing channel includes: a firstauthorization process receiving the authorization request and routingthe processed authorization request to the data storage device; and asecond authorization process receiving the processed authorizationrequest from the data storage device and routing the processedauthorization request to an output of the system.
 5. The system of claim2 wherein the file-based transaction is a clearing and settlementtransaction.
 6. The system of claim 5 wherein the second data processingchannel includes: a clearing process receiving the clearing andsettlement transaction and routing the processed clearing and settlementtransaction to the data storage device; and a settlement processreceiving the processed clearing and settlement transaction from thedata storage device and routing the processed clearing and settlementtransaction to an output of the system.
 7. A credit card processingsystem, comprising a data processing center having a direct or indirectcommunication link with a merchant to receive a credit card transactioninitiated by the merchant, wherein the data processing center includes afirst data processing channel for processing a message-based transactionin selectable currencies of a plurality of currencies and a second dataprocessing channel for processing a file-based transaction in selectablecurrencies of a plurality of currencies.
 8. The credit card processingsystem of claim 7 wherein a first one of the selectable currencies is aclearing currency and a second one of the selectable currencies is asettlement currency.
 9. The credit card processing system of claim 7further including a data storage device for storing the processedmessage-based transaction and the processed file-based transaction. 10.The credit card processing system of claim 9 wherein the message-basedtransaction is an authorization request.
 11. The credit card processingsystem of claim 10 wherein the first data processing channel includes: afirst authorization process receiving the authorization request androuting the processed authorization request to the data storage device;and a second authorization process receiving the processed authorizationrequest from the data storage device and routing the processedauthorization request to an output of the system.
 12. The credit cardprocessing system of claim 9 wherein the file-based transaction is aclearing and settlement transaction.
 13. The credit card processingsystem of claim 12 wherein the second data processing channel includes:a clearing process receiving the clearing and settlement transaction androuting the processed clearing and settlement transaction to the datastorage device; and a settlement process receiving the processedclearing and settlement transaction from the data storage device androuting the processed clearing and settlement transaction to an outputof the system.
 14. A method of processing a data transaction,comprising: receiving a message-based transaction and a file-basedtransaction; providing a first data processing channel for processingthe message-based transaction in selectable currencies of a plurality ofcurrencies; providing a second data processing channel for processingthe file-based transaction in selectable currencies of a plurality ofcurrencies; and storing the processed message-based transaction and theprocessed file-based transaction in a data storage device.
 15. Themethod of claim 14 wherein a first one of the selectable currencies is aclearing currency and a second one of the selectable currencies is asettlement currency.
 16. The method of claim 15 wherein themessage-based transaction is an authorization request.
 17. The method ofclaim 16 wherein the step of providing a first data processing channelincludes: providing a first authorization process for receiving theauthorization request and routing the processed authorization request tothe data storage device; and providing a second authorization processfor receiving the processed authorization request from the data storagedevice and routing the processed authorization request to an output ofthe system.
 18. The method of claim 15 wherein the file-basedtransaction is a clearing and settlement transaction.
 19. The method ofclaim 18 wherein the step of providing a second data processing channelincludes: providing a clearing process for receiving the clearing andsettlement transaction and routing the processed clearing and settlementtransaction to the data storage device; and providing a settlementprocess for receiving the processed clearing and settlement transactionfrom the data storage device and routing the processed clearing andsettlement transaction to an output of the system.
 20. The method ofclaim 15 wherein the data transaction is a credit card transaction. 21.A method of processing credit card transactions, comprising: separatingthe credit card transactions between a message-based credit cardtransaction and a file-based credit card transaction; processing themessage-based credit card transaction through a first data processingchannel in selectable currencies of a plurality of currencies;processing the file-based credit card transaction through a second dataprocessing channel in selectable currencies of a plurality ofcurrencies; and storing the processed message-based credit cardtransaction and the processed file-based credit card transaction in adata storage device.
 22. The method of claim 21 wherein a first one ofthe selectable currencies is a clearing currency and a second one of theselectable currencies is a settlement currency.
 23. The method of claim22 wherein the message-based credit card transaction is a purchaseauthorization request.
 24. The method of claim 23 wherein the step ofproviding a first data processing channel includes: providing a firstauthorization process for receiving the purchase authorization requestand routing the processed purchase authorization request to the datastorage device; and providing a second authorization process forreceiving the processed purchase authorization request from the datastorage device and routing the processed purchase authorization requestto an output of the system.
 25. The method of claim 22 wherein thefile-based transaction is a clearing and settlement transaction.
 26. Themethod of claim 25 wherein the step of providing a second dataprocessing channel includes: providing a clearing process for receivingthe clearing and settlement transaction and routing the processedclearing and settlement transaction to the data storage device; andproviding a settlement process for receiving the processed clearing andsettlement transaction from the data storage device and routing theprocessed clearing and settlement transaction to an output of thesystem.